manus: it gets personal. clinton and trump doug directly tax,e directly into u.s. economy, race, and more. stocks rally yen tumbles. in the mexican peso tumbles. profitability problems. there isghi says overcapacity in european banks. this, as greta traders expressed concern over deutsche bank's weakening -- this as credit

traders express concern over deutsche bank's weakening health. a very warm welcome to count on. i'm anna edwards. manus: and i'm manus cranny. did you look at that debate last night? it got personal, didn't it? anna: yes, and the reaction in the markets was very clear. there in mind, the -- bear in the mind, the mexican peso has lost 1/3 of its value. manus: that is why we got here nice and early. anna said, there is a lovely correlation, manus. it is of course the mexican peso in blue. that is the rally the analysts were talking about. and indeed, the drop in the yen. so, you are seeing the yen on a one month high.

we have volatility in the peso at levels we have not seen since 2011. what reward do you get when the market things clinton is going to win? the currency has often declined when the trump camp improves, but tends not to gain as much with the data favoring clinton. cnn poll suggests that 6 62% think clinton won. let's bring up the risk of radar markets you what the are telling us. we saw a turnaround in stocks. we have the futures in the u.s. now, suggesting this is a relief rally in risk assets. manus: ok, let's get the first word news with david ingles. david: thank you, manus.

financial markets have judged the first of three american presidential debates a win for hillary clinton. mexican's peso rallied from a record low and gold retreated. separately, in a cnn-orc poll, 62% said clinton won the debate. the ecb's mario draghi says european banks have probability problems and one of the issues -- have profitability problems and one of the issues is overcapacity. he also spoke to lawmakers about how to spur growth in the region. euro area toe thrive, we need to offer essential protections for the most vulnerable. manus: the bank of england's

corporate bond buying program gets underway today. that boe plans to purchase 10 million pounds of sterling investment grade corporate debt over the next 18 months to help the u.k. economy whether uncertainty caused by the brexit mode. yuan borrowing in shanghai rose to a seven-week high as china's central bank pulled funds for the second week in a row. according to the funding sector, we saw a climbed to 1.24%, the highest since august 4. there are signs policymakers want to discourage the excessive use of part of money to purchase assets. richard perry, one of the biggest names in hedge funds, is calling it quits after 28 years. he is monday down his new york-based flagship fund. -- he is winding down his new york-based flagship fund. he posted a return of 18%

without ever having a down year. whatever the last year, ihis funds have lost nearly half of their assets. global news 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries around the world. you can find more stories on the bloomberg at top . this is bloomberg. anna: thank you very much. let's check out the latest market action over in asia. julia sally has the details for us. you have been watching the debate and the markets are reacting. reporter: they certainly have and as steve mentioned, you can see that traders viewed the debate as a clinton win. the japanese equity market was off by 1.5% before the debate y .5%.d and is now up b citi also came through with a note saying japanese stocks are

likely to gain on a clinton presidential win. if there is a president trump, it could lead to a 5% to 10% decline in japanese equity. we has the most japanese markets staged a little bit of a turnaround after the debate. mostly in japan, but also in korea and hong kong. hong kong stocks are climbing after that one day selloff we saw during monday. they fell the most in two weeks during yesterday's session, but today, a lot of good movement coming through. the casinos, also getting a boost on this market sentiment that clinton won that first debate. still some weakness coming through in australia on commodities players. new zealand is up by .2%. and taiwan is closed today as the typhoon bears down on the region. let's have a look at othe other stocks. hanjin is up 23%. this, as the world's biggest miner company said it could

be selling off of some of hangin's assets. we are also looking at hyundai merchant's assets. this is because thei was talking about in hong kong, very much lifted on the back of this debate. weekly checking o -- quickly checking on that yen. investors viewed this as a clinton win. back to you. manus: thank you very much. just a couple of lines coming through from abe. there is no need to rethink the portfolio and negative interest rates coming from the raising costs to reaffirm. this is as we try to reaffirm and justify the negative interest rate policy. this was the first of three televised u.s. debates. it descended into accusations and blame last night with

hillary clinton and donald trump clashing over trade, race, and foreign policy. hillary clinton hit trump on the handling of his business interests. hillary clinton: i have met a lot of the people who were stiffed by you in your businesses, donald. i met dishwashers, painters, architects, glass installers, marble is dollars, drapery installers, like my dad was, who you refused to pay when they finished the work you asked them to do. anna: meanwhile, trump criticized clinton for her role in the middle east crisis. donald trump: the middle east is a total mess, under your direction to a large extent. you started the iran deal, another beauty where you have a country that was ready to fall. i mean, they were doing so badly they were choking on the sanctions and now, they will actually probably, be a major power at some point soon at the rate they are going. anna: they sounded like some of

the more polite exchanges. megan murphy was at the debate. she joins us now. we went into this debate then, with trump and clinton tied in the polls. was there a clear winner of the night? >> certainly, there was a clear winner. it might not have been the performance that put donald trump away, but hillary clinton was largely viewed as the victor. not only with market reaction, but in consensus groups, she was very successful at keeping a measured tone, laughing off some of donald trump's more outlandish statements and most importantly for her, hitting him where it hurt on a few key issues. one, his failure to release his tax returns. also, his continual refusal to distance himself from his very controversial birther debate,

when he called into question as to whether barack obama was actually eligible to be the president, whether he was born in the u.s. or not. it has caused a little bit of a racial divide in america, something she seized on. it left him looking a little bit worse for wear tonight. manus: the outgoing polls from 62% gave it to clinton, which is reflected in the relief rally. equities are pacing ahead and the mexican peso has taken a little bit of hard from this. this is the first of a number of rounds for the market, isn't it? >> we have always talked about whether the market was fully pricing in the possibility of a donald trump victory. the markets seemed quite sanguine as this campaign went on. as you said, the mexican peso emerged as the best proxy regarding how the candidates are doing. trump'sdue to donald

idea of building a wall. that would weaken the country's economy. overnight during this debate, we saw the mexican peso surge over 2%, indicating the markets think hillary clinton delivered a very strong performance. there could be a silver lining for donald trump. we still have two more debates and his performance, i think his campaign would admit candidly, his preparation was not where it should be to be able to match up with somebody who has the export of expertise and discipline and experience and training hillary clinton, particularly in these one on one debates. you barely touched on her e-mails. he also barely touched on her very low favorability ratings and her lack of trustworthiness. with so many voters out there, that has really dogged her campaign. they might say, it was such a

low bar that we did not cross over it, but now we have room. anna: megan murphy, thank you for joining us. great to get her analysis on the program and joining us now as the guest host for the hour is mike. this is the first of a number of the dates leading us presidential election. what is the big investment implication for pimco there? >> you saw a little bit of that this morning. you know, the markets don't like uncertainty. if you look at the two candidates, i think you get simply policy clarity because donald trump is a bit of an unknown quantity and you can see that within a market reaction today. the dollar is up and equities are up. they had a little bit of iraqi a rocky ride yesterday. the u.s. presidential debate is

a number of political hurdles we have to get through over the next 12 to 18 months. you could look at the presidential election and the referendum in december. you have the french and german elections. many of these risk moments out there, which were us, tend to suggest, particularly given where markets are, that could be a little bit of a more cautious start. manus: that rolling card of electoral issues, in the bond wo yourraditionally, um, world favors the volatility, the uncertain. and i buy treasuries and jgb's and gilts. do those models still hold up at the helicopter level? >> i think they do. it depends on which market you look at. .s. treasuries,u there is room to go in both directions. you have thae fed on the one

hand, who look like they want to raise rates. and you have 10 year yield, 5.116% is not exactly a great value. we know they are all skewed by central bank activity. that there is room to rally if we get a bad political outcome. -- but there is room to rally if we get a bad political outcome. jgb's have been a tricky one because we had lower yields in the first i place. manus: this is the mob index. we are back at 2014 lows. thing aboutesting that chart is it shows you what a good job central banks have done at supporting assets over the last few months. obviously, there has been a variety of unexpected outcomes, brexit being the classic example. that central banks have been pretty active.

beinge thaee ecb engaged. that is what you see in that chart there. you see central banks pretty good at suppressing volatility. the challenge we have got is some central banks are moving towards the end of what we would expect them to do, the bank of japan being the classic example. i think we will see a little more of a cautious start. that is what we are doing. anna: tell us more about that start. what looks most exciting to you in the bond market? what would you avoid? >> we would say credit, general, have had a really good rally. you know, we would recognize that we, when you look at government yields, you have that e fed on the one hand trying to raise rates ,but in a world of low interest rates, they have room to rally. looks kind of --

we are pretty agnostic on duration. in terms of risk assets, our things thats to buy we would be comfortable owning if we do see volatility. i know manus have got a busy day ahead of him today. manus: i know more about high-yield than we ever wanted to. mike amey, stay with us. anna: here is a quick look at your day ahead. the italian prime minister presents his national investment plan. manus: 30 minutes later, we get the u.s. consumer confidence data. and at 6:30, the bank of england chief economist speaks at an event in london. anna: still to come, fed friction. two members of the central bank show how they would have voted.

corporates. and we bring you the analysis. anna: plus, we are live in algiers for the kickoff of opec's informal meeting. this is bloomberg. ♪

manus: it is just 1:20 in the afternoon in hong kong, but the markets have a nice relief rally. orc of those polled by cnn- suggest clinton won the debate. let's get to the business flash with stephen engle. reporter: thank you. traders are again expressing concern about deutsche bank's weakening financial health. they have been pushing up the cost of short data contracts. is climbing swap

faster than the five year, which could be an indication of stress. commerzbank will reportedly announced its restructuring plan on friday, citing people familiar with the move. this will include 9000 job cuts by 2020. the plan, which needs approval the nonexecutive super advisory board, will cost up to one billion euros. disney is working to evaluate a potential bit fd for twitter. however, they could have a fight on their hands. representatives for twitter and disney did not respond to requests for comments. urge afterd a s reports were made public that a sale was moving forward. the company is expanding around the world. the chief technology officer and

cofounder told bloomberg about airbnb's plans. expandingar, we were into china. we have been doing a lot of marketing in china, a huge market. all of asia has been really promising. we also have been looking at india. increasingly we have been looking at emerging markets. airbnb took root in the europe and in the u.s., but we think the future of the business could be in asia. reporter: that is your bloomberg resinous flash. anna: thank you very much. now, two federal reserve officials that will vote on monetary policy next year offer different views on whether to raise interest rates this year. robert kaplan said he would hold back the hike, saying he was concerned about distortions that the lower rates were creating. manus: meanwhile, the

minneapolis fed chief questioned as to whether the economy can sustain a higher rate environment. mike amey is still with us. so, the great debate in terms of the changing complexion of the fed. one of the best lines i have read so far is that the dots that the fed produced, the dots are catching up with the market, but the market is not catching up with the dots. would you agree with that? how hawkish do you think this will make 2017 for us? >> absolutely. they are trying to hike rates in a way that does not destabilize asset markets and risk yo, you know, an unnecessary slowdown. they will do this by saying, even if we raise in the next month or two, if you keep lowering those dots at the back

nd, those longer-term dots, then what you are saying is, i am going to formalize my statement not only by going quite slowly -- and a year is pretty slow -- if you keep the quench of the burning the longer-term neutral rate down, you hope to suppress the market volatility, even if you raise rates. in 2017, clearly, they are going to try to raise rates again. mucharkets have pretty prized foced for one by the endf 2017. anna: is one a year becoming a real thing? [laughter] >> there is a reasonable chance they will be more than that. we think the risk reward is a little more than that, but maybe one or two. you know, we would take the

end of the high rate. anna: what is the biggest threat of them not doing those rate hikes? as we go through the year, fewer and fewer rate hikes are being priced in. >> i think the biggest threat clearly, is they get no traction on wages and inflation remains very low. i think we have all been surprised by how sluggish wage growth has been, and whether that is a global phenomenon or domestic phenomenon. our expectation is they will get traction on wages, but if you struggle to get that traction on wages and we get one or two fof these risk events, clearly, they will be inclined to go slower, rather than faster. manus: when we were just chatting over the break, you said, "actually, i am more interested in the bank of japan."

we are having this debate, as to whether this is a form of tightening, easing, and whether targeting the yield curve works. what is the consensus of pimco thus far? would struggle to say this is a loosening of policy. they are trying to pump less cash into the system under the new rules. , they were doing you program, the aim is, if keep going at that rate, they will own 50% of the jgb market by the end of next year, which most of us would argue i think, is too high. their intention is to anchor rates, but spend less cash. we would argue that is a bit of a pullback. anna: just briefly, you are suggesting this is unlikely to deliver more inflation? >> correct. so, a statement of overshooting

inflation looks like a few years off for us. amey stays with us. manus: i am off now. 7:30 a.m., these are the people i will be talking to. r one.l marsh, fo ♪

anna: welcome back. this is "countdown." in london.n 6:30 a bit of a move fact, it is weas morning. isew edition of "daybreak" now available on your bloomberg and on your mobile. let's get a look at some of those top stories. the common story is the u.s. presidential debate. a cnn-orc polls showed that 62% of voters. hillary clinton won thought hillary

clinton won the debate, donald trump dominated on social media. the mexican peso rallied almost 2%. it has lost almost 1/3 of its value. trump says he wants to renegotiate nafta, and has made many other comments about mexico . finally, "daybreak" focuses on commerzbank's restructuring. the plans include 9000 job cuts. that is according to handle sblatt, which cites people familiar with the matter. u.s. futures have gained. this was the first of a series of debates between the presidential hopefuls. we have been looking at the details in the market. nejra: yes, you mentioned the polls are favoring hillary clinton as the winner of this debate. it looked like investors are as

well because it is very much risk on today, a very different picture from yesterday. you can see the s&p 500 futures, the blue line rising some .6%. asian shares, erasing earlier losses. up asia-pacific index is now .3%. these two moving in tandem. if we take a look at haven assets, as you would imagine, they are moving down. i have the dollar-yen against gold come up .4%, 100.72. the yen is the worst performing currency today. if we take a look at gold, it is down on track to end its longest winning streak since july. moving on, you were talking about the mexican peso. please is seen as a little bit of a proxy as to how donald trump is doing, in the sense it moves inversely as to his prospects of becoming president.

have the dollar against the mexican peso. in other words, the dollar is falling and the peso is gaining. it is set for its best one-day gain since february and it is the best performing currency against the dollar. while, the yen, as i said, is the worst. have the canadian dollar here, greenback losing, and the canadian dollar gaining. it is strengthening from its weakest since march. we do not actually see a gain in the oil price. in general, we see a rally in the risk assets today. oil has haulted its gains after two days of price swings. this is ahead of htthe meeting algiers. will the production be frozen? you can see the inverse relationship between the oil price and the output rising.

given us will and -- the venezuelan oil minister says prices could tumble below $20 if no deal is reached. anna: the bank of america has begun its own corporate bond buying program. the bank of england has a list of bonds eligible for purchase in the 10 billion pound scheme, including overseas companies such as verizon and apple. joining us now on set to discuss, bloomberg news global credit risk strategist, simon ballard. given what we have learned from the ecb, and how their bond buying program has been going, what implications does that have here? >> let's look at what has happened since march. we have seen very rapid compression spreads and yields. i think we will see a similar effect coming into the sterling market. although from a fundamental perspective, you can look at the growth and inflation, which continues to evade the ecb.

perspective,ental you have to question as to whether the corporate bond buying program is having the effect that the central banks wants. probably, a similar case will be seen in the u.k. there is a supportive reaction within sterling corporate bonds, for the compression of the quality curve during the central bank's buying spree is chasing yield elsewhere. anna: it does not sound like you think that ecb's plan has been all that successful. >> i think it has been successful in terms of manipulating asset prices, but not including growth and inflation in the short-term. so, you have got to think that perhaps that asset price manipulation will continue in releasing iand will the same ine u.k. anna: what do you think of corporate bond buying programs as a way of generating inflation? >> corporate bond buying programs are relatively, it is quite tricky to spend a lot of

cash in a corporate bond buying program. that is the basic problem. the hope of central banks is that when you do it, you try to encourage companies to raise their borrowing in your domestic market. the bank of and the program was all about making sure they retained some liquidity in the sterling corporate bond market. that ecb was slightly different. when they started buying bonds, that was march of this year. there was quite a big debate about negative interest rate, and what else you could do. i think corporate bonds tend to be one of those things you do when you are running out of other options. so, it is helpful, but i don't think it is a game changer. anna: simon, how successful are these policies then, at getting companies to do what you want them to do, to borrow, invest, x capital expenditure, those things? >> this is a chicken and egg

scenario. you want the companies to invest to create growth, but they will only do so if there is some kind of got behind it. thus far, we have not really seen within the european corporate and financial, that money being put into growth generating sort of parts of the economy. it is used to shore up energy. anna: somewhat hope new names would come in to raise support. but that has not happened. >> somewhat hope they would take on the leverage. anna: thank you, simon ballard with the credit story of thae u.k. .k. a talk about thae u little bit more. rates were cut in the media aftermath of the brexit growth. now, there are many debates as to when they will next cut

rates. they have suggested they could do that again. do you think december sounds like a good time for them to go, or do you think they should wait until article 50 is triggered so they have somewhere to go at that time? >> i think there is a good chance they will wait, actually. ifif you look at the market response and the way the economy has held up so far, it has held up pretty well. obviously, that rate cut and standard qe is around already. we are obviously going to get some sort of fiscal response in november. if i was in the bank, i think i would be inclined to wait, actually, and see how the economy progresses. they have not got that much wiglgle room. if i were on that committee, i would be inclined to wait. i think november and december is possible, but market

expectations have some of that prizeced in. shouldow high expectations be? we have had mixed signals, haven't we? >> i think the chancellor is trying to highlight the fact that there is some room to maybe alter fiscal policy relative to what we had under george osborne, which was another couple years of really tight fiscal policy. point about one oine coming off each year. i think we will see a slowdown of that path, maybe leave the deficit, roughly speaking, where it is. more than that, i would be surprised. conservative government generally want to get that deficit down over time.

i think the markets would agree with that. anna: they have also talked about investment in infrastructure. i was at the labour party in liverpool and that was a topic of conversation as well. how much would the market for give the u.k. government if that was moving into things like infrastructure? >> i actually think the markets would be pretty comfortable if we slowed down the austerity period. if you look at the way the economy is progressing now. i think they have got a scope to slowdown infrastructure cuts. anna: and to borrow more? >> i think it would be little bit tricky if you start to raise the deficit. if we slowed down and you know, stabilize, and then we come back down again in a couple years, i things we will be fine. if things move in the opposite direction, the markets will be little more skeptical. anna: we were just talking there

about george osborne and as the bank of england and mark carney get a new strategy with the corporate bond buying program, the plans of george osborne have been well and truly shelved by prime minister theresa may. so, how does he feel about that? we know he started his own activities around the northern powerhouse. we will be speaking with him exclusively at 2:00 u.k. time this afternoon in his first television interview since leaving the post as chancellor. please do miss that. that is at 2:00 this afternoon. mario draghi spoke before european parliament, addressing several topics, including european banks and weak profitability. he says one of the reasons for the difficulties is overcapacity, but not to overgeneralize when it comes to the banking sector. >> there are many hundreds of small banks who do a very good

job about serving their clients. we certainly don't want to disrupt that. banks thatre other could be consolidated. portfolio manager at pimco, mike amey, go with us. amey, he is talking about bank consolidation. does that make sense to you? >> the european banking sector is weak. you can see that if you look at the bank's stock index. there is the challenge their of lower interest rates and the challenge that put some interest margins. i think he has a point. europe is generally overbanked and could do with consolidation. entitieslian and german have come under the most pressure this year, two heavily banked countries. if you look at the countries

that are doing better, spain is a classic example. they took quite decisive measures to consolidate their banking system and the spanish economy is doing quite well. the data is there any message is quite clear. anna: what is the message? take decisive action and then, have no government? >> the methods in spain is the party seems to be doing well, despite the political challenges. so, the infrastructure within the economy must be ok. they have got some challenges out there, but the infrastructure of the country seems to be holding up pretty well. isi said, the banking system part of that. it is one of the stronger performers in europe. anna: the deutsche bank story has brought the issue of capital raising back onto the agenda for the european sector. do you think generally around europe the banks need more capital? >> yes, i think they do. if you look at that example,

part of the pressure is people expected a capital raise out of some of these challenged banks. you can see that with monte de paschi. there is some scope around deutsche with the fines they are getting. part of the problem is, you don't know how much those fines are going to be. i think that uncertainty creates the volatility. anna: we have these big political events. the conversation is looming in europe, as well as in the united states. what is the headline grabber? the italian story is a little bit more nuanced, it is my general election. but it could have implications for the banking sector. >> it could. it certainly put the banking reforms on a pretty slow path, frankly. theink we would argue that renzi faces,hat italy has had a relatively challenged system for a while and he is trying to change it,

but i think we all know the system is not perfect. i think it would be surprising if the italian referendum you know, where a big risk event for markets, but he clearly puts pressure on the italian banks. anna: mike amey, thank you very much. coming up, day one. we are live in algiers for the kickoff of opec's informal meeting. at 7:00 u.k. time, we have the highlights of the first presidential debate and the market reaction, of course. plus, we speak to the ceo of rolls-royce motors live in tokyo. this is bloomberg. ♪

anna: welcome back, a live shot of new york at 1:48 this morning. the futures are suggesting we will see a bounce at the start of u.s. equity trading. let's get to the bloomberg business flash. reporter: hi, anna.

credit derivative traders are again expressing concerns about deutsche bank's weakening financial health. they have been pushing up the cost of sure data contracts. this can be an indicator of stress. trading's shares are fall near record lows. the move will include 9000 job cuts by 2020. the paper says the plan, which needs approval from the bank's nonexecutive by the report advi, will cost one billion euros. someone with knowledge of the matter last said last week that goldman sachs is planning to cut 1/4 of its asian investment banking positions.

bank of america declined to comment. goldman sachs said they were unable to comment. disney is working with a financial advisor to evaluate a potential bid for twitter. however, the company might have a fight on its hands. for twitter and disney did not respond to the comments.or twitter's shares have surged. american express can stop stores from asking customers to use rival customers with lower transaction fees. the federal appeals court decided amex did not violate anti-trust laws. this is a blow to u.s. businesses trying to reduce card fees, which run at about $50 billion each year.

airbnb has raised about $50 million in new funds. this company is expanding around the world. the cofounder and chief officer tells bloomberg about the company's plans. >> the fastest-growing country was china. we have been doing a lot of marketing in china, a huge market. all of asia has been really promising. we are also looking at india. increasingly, we are looking at emerging markets. this really took root in europe and in the u.s., where more than half of our business is today. we think the future of the business could be out of asia. reporter: that is your bloomberg business flash. anna: better get renzi out of that house, then. wti has ticked slightly lower ahead of crucial opec meetings in algiers. members, i'll jerry a, algeriad

voiced themselves'll jerry at e to be in favor of this freeze. is a deal to freeze output really likely, then? >> we are getting closer to the deal, just because the fundamental supply and demand picture has radically changed. not just that. the stakes are even higher now ,ecause you have russia, libya and nigeria expected to put an additional 800,000 barrels each day into the market. so, a lot of pressure on that front. and of course, they are grappling with their domestic financial difficulties, especially saudi arabia. we are hoping they will come to some kind of agreement. they have said, if we are exchanging ideas and proposals and laying the groundwork for an official announcement later in the year in vienna, then, that

is already achieving expectations. nigeria is confident there will be some kind of united arab emirates deal. they say output cuts are not on the table, but they do support the freeze. at the end of the day, opec as a group is competent. 3.6 9 million barrels a day in august. it has grown since the doha meeting, since they decided to let everybody pump as much as they wanted in late 2014. we will see more discussions ahead of the opec gathering. the international energy forum is convening that some 90% of global producers are represented here. of course, we will keep you posted throughout the day. anna: yousef, thank you very much. that was yousef gamal el-din on the phone.

don't miss our interview with the executive director. today, at 8:30 a.m. london time, on "countdown." mike amey is still with us. what are your expectations coming out of algeria. >> we would be surprised if any kind of deal is struck in algie algeria. the discussions are clearly being done. whether a deal could be done, we are pretty skeptical. there could be some disappointment there. on the flip side of that, the other interesting thing about what is going on is the a saud's no longer seem to be willing to talk down the oil price. they seem to be coming down to the view that some kind of support is possibly down the road, but at this point, we are skeptical. so, are they just promising things they know they

can safely promise? >> we think largely, yes. they are thrown things on the table they don't think the other parties will be able to agree to anyway. but at least, relative to where we were 12 months ago, that is a start. you have to start somewhere. the other interesting thing, you can see this on your charts. you see this relentless rise in supply. but at least we got to the point whereby the price itself has been relatively stable around $45 to $55. we think that is what will happen, we will see this relative stability capped out because of that shale situation, but demand is holding up ok. as long as that holds up, we think these levels could be sustainable. anna: we are showing the opec output in the white, and then the wti price and brent price. your expectation is we will stay around $45 to $55? >> yes, we are at a reasonable balance.

we will get noise around these events. but broadly speaking, we think the volatility in the oil market is more behind us. anna: what is that due to the global inflation story? the crash in oil prices put the central banks in this place, where they have had to be so creative to drive up inflation. we saw what happened to bond yields as a result. >> it is helpful because we have headline cpi levels, which are negative in some places and zero in others. that is a problem. so even getting them back up to core levels is a start. think broadly speaking, it is helpful. i think it is supportive of market. there is a question about the chicken and the egg here of course, whether central bank activity as my you have seen stability in these asset markets . i think there is a little bit of that in that there.

but broadly speaking, this is helpful. anna: mike amey, great to see you with us. up next on the program, we speak with the ceo of rolls-royce motors. how are they doing i in china and in the u.k.? this is bloomberg. ♪

anna: it gets personal. clinton and trump dive into attacks in the first presidential debates, leveling sharp charges over trade, race, and foreign policy. traders gave the first round to clinton. the yen tumbles, and the mexican peso surges. the ecb's mario draghi says overcapacity in european banks and consolidation is important. this, as credit traders expressed concerns over financial hacks. anna: warm welcome to "countdown

." i am anna edwards. we have had some market reaction to the first of a series of presidential debates in the united states. what is that going to do to the start of the european equity trading day? at futures. look it looks as if we will be stronger at the start of trade. we saw asian equity markets moving strongly higher, up by around 0.6% at this stage of the trading day, so there was some positive reaction for risk assets as a result of the debate, with 62% of those surveyed by cnn claiming that clinton had done best. we will return to that theme in just a moment. let's get to breaking news. we have comments coming through from a bunch of u.k. corporate's. thomas cook, giving their numbers. this is europe's second-biggest tour operator, in fact that they are not changing their underlying ebit guidance.

bookings are in line with west 2016-2017,winter of which is interesting giving the brexit context. they are then going on to talk about the winter season being 27% sold. down,re booking 4% including turkey, because it is not just the brexit vote this business has to deal with. various terror have taken a toll on the tab -- travel industry. this is a business that we know has been turning increasingly to wealthy chinese as a way to boost their company. let's talk about wolseley. this is a plumbing business, essentially. like for like a growth in the new financial year, 1.5%. on adjusted eps, --

full-year-revenue, $4.4 billion. this is a company that some analysts have pointed to as potentially able to return a little bit more cash to shareholders. we had some comments from davies about how there might be scopes for further capital returns. we've had comments from ubs talking about, they be there with $350 million in a capital return or buybacks. anything they have to say about the u.s. and how the business is doing will be interesting given the softer construction data we have had out of the u.s. construction business. that is what good body is saying they are focused on. let's show you where we've been on various assets, and all of this takes into account what we have seen in the u.s. presidential debate. the markets have taken that in a risk-on fashion. the s&p futures suggest we will be higher in the u.s.

we've got weakness for the japanese currency, down by 0.5% against the u.s. dollar. let's get the bloomberg first word news with stephen engle. the ecb's mario draghi says european banks have profitability problems, and one of the issues is overcapacity. the central bank president suggested consolidation would be an important move. he spoke to lawmakers about how to spur growth in the region. >> for the euro area to thrive, actions by national governments are needed to unleash growth, reduce unemployment, and empower individuals by offering essential protections for the most vulnerable. stephen: the bank of england's corporate bond buying program gets underway today. the doe plans to put 10 billion pounds of sterling investment grade corporate debt over the next 18 months as part of us do is to help the u.k. economy whether uncertainty caused by

the brexit vote. in china, you one borrowing costs rose to a seven-we cai as china central bank pulled friends from the financial seven-week high as china's central bank pulled funds from the financial system. a shipping company has jumped after jefferies international said mueller merck is targeting the south korean shipping firm and its local rival hyundai. merck's chairman revealed that the container line plans to pursue takeovers but wouldn't be drawn on hanjin's shipping. news 24 hours a day powered by more than 2600 journalists and analysts, you can find more stories on bloomberg at top .

i'm stephen engle. this is bloomberg. anna: thank you very much. let's have a look at how the markets up and reacting to the first of a series of debates by the presidential candidates in the united states. it had an impact on markets. juliette saly, how did it play out for the asian equity day and beyond? te: we saw traders view hillary clinton as the winner in that first presidential debate. have a look at the nikkei closing higher up close to zero point 5%. at one point, japanese equities were off by as much as 1.5%, but then we started to see money normallyt of the end, seen as a safe haven, but money coming back integrity markets. we've also seen korea close higher, up by 7/10 of 1%, health lped out by that surge in hanjin shipping. it was the biggest drop we have seen in hong kong equities in

two weeks come up by almost 1% in late trade. there has been a lot more risk appetite in the couple of hours since the debate, asian stocks theing around from what was regional index being down. it is higher now thanks to that and in japanese equities, of course, the gains we have seen in the was futures market. it's worth noting that citi has come through with a note saying that a clinton presidential win would be strong for japanese equities, while they say a trump win would have an impact on japanese stocks to the tune of a 5% or 10% decline. certainly, money coming out of safe havens, back into equities, as markets view a clinton presidential win from that first debate. much,thank you very

juliette saly in hong kong. the first of three televised this election debates descended into accusations of blame. hillary clinton and donald trump clashed over subjects including trade, race, and foreign policy. >> first, we have to build an economy that works for everyone, not just those at the top. that means we need good jobs with rising incomes. i want us to invest in you. >> our jobs are fleeing the country. they are going to mexico. they are going to many other countries. if you look at what china is doing to our country in terms of making our product, they are devaluing their currency because they are using our country as a piggy bank. >> i have met a lot of the people who were stiffed by you and your businesses, donald, who you refused to pay when they finished the work that you ask them to do. >> i take it then adjust the laws of the nation because i am running a company. is to dotion right now

well for myself, my family, my employees. >> we also need to have a tax system that rewards work and not just financial transactions. the kind of plan that donald has put forth would be trickle-down economics all over again. in fact, it would be the most extreme version, the biggest tax cuts for the top percents of the people in this country. i call it trumped up trickle-down. some of the exchanges from last night's presidential debate. a lot more of that to come over the next couple months. chief globalby s&p economist and executive vice president paul shared. great to have you on the program. what are the implications for the global economy from the conversation? global trade to some extent seems to be on the dock, and we heard some of the quotes. would a trump victory means something incredibly different in your world from a clinton victory?

very much onnds what would happen under a trump presidency versus a clinton presidency. i think it's a little bit dangerous to extrapolate from the heated rhetoric of the campaign, but on the surface, of course, people worry about what would happen to trade under a trump administration. you scratch or had a little bit with trump. of course, he is the author of "the art of the deal." to some extent, his positions are more like a bargaining my leverage,ing to as opposed to something that would actually happen in terms of policy. anna: you don't pick we know enough about the policies to say whether he poses a bigger threat to the globalization story and the global economy? paul: if you went into the details of the different policy positions, you could make arguments on both sides of the ledger. the positions on trade, if they

were to come to fruition, would be certainly a worrying factor for markets. on the other hand, the regulation is a big theme of trump, and also, tax cuts and corporate tax reform. that would be a big theme coming from not just the trump administration but a republican congress. that is one of the differences to bear in mind between a trump and clinton administration. if there is a trump presidency, almost certainly you would have a republican congress. if you have a clinton administration, by no means is it assured that congress would swing into the democrats' column. anna: what implications are therefore for the fed and how high interest rates go? we saw last week the fed bringing down expectations of how high rates go in 2017 and into the medium-term. the lower for longer mantra seems to be reinforced. paul: of course, the fed has been in the firing line from

trump, but the fed tries to stay out of politics and be a political they did take a pass last week. just a, the story is killer stagnation debate has come to the fed, and that was pretty obvious in june. in other words, what the fed is trying to figure out is, what is the underlying structure of the economy in terms of where the natural rate of interest is? that is a concept that central banks used to calibrate their policy. what the fed is saying, maybe the longer-term, neutral fed funds rate is much lower than we thought it was, and if that is the case, they don't need to hurry to get back to something that looks like a neutral rate. they can take their time. that is the debate they are struggling with. what is going on in the basic model of the economy? it's something fundamentally different. anna: thank you so much, paul. about the car sector,

because japan continues to be a priority market for rolls-royce motors. growth is up 23% in the country. ahead of the paris motor show, we are from tokyo by the carmakers ceo. great to have you on the program. i've spoken to you many times on countdown, and it's good to hear your thoughts. i wonder if you can update us on how current trading is, how the business is doing. what is the sales outlook for this year? >> good morning, anna. first of all, i am here in japan. it's an excellent market for us, the fourth biggest market worldwide for us. as you rightly said, 23% up compared to the previous year. i must say in total we are facing good market conditions. we see quite a strong year ahead of us here. can you dissect that a

little bit for us? i had some troubles in china. we have had some troubles in china. how stable is the chinese picture at the moment? >> it is very encouraging. we see green sprouts coming back, so the market is recovering, and we are in a much better state than we were in a year ago. i'm very confident that we see the market picking up again for the next couple years. the confidence is back in the markets. confidence is back in china. what about the middle east? >> the middle east is in a way hampered by oil prices. they are very dependent on that, and of course, the share market is affected, but in total, the middle east is still strong for us. it had been. -- have been our second-biggest region in the world, right after the united states.

for that reason, it is probably this year not any longer in the second position, but let's wait and see. still three months to go until the year ends. anna: can you update us on your plans, your plans for specific models? we talk a lot about a electric car at rolls-royce, for example. how close is that? you might remember that we have unveiled in july our vision which is our lighthouse, in a way, how rolls-royce should look in 2040, fully self-driving, electric-propulsion, custom-built body, and something which clearly underlines the transportation of the future, particularly in the luxury segment. it's very different from what i would call transport commodities we see popping up all over the world. talking about unveiling

new vehicles, what about the suv? i know you don't like to call it an suv, something different at rolls-royce, but is the target date still 2018? endeah, that comes at the of 2018. first of all, in the beginning of 2018, we'll see the new phantom come into the market, whatightly follow it by you call our suv project. it will be an all-terrain vehicle and truly a rolls-royce. anna: on the subject of brexit, this is something we talk about in europe, and you are very familiar with all of the issues at stake. how involved are you in pushing your message? what does rolls-royce want to see from the brexit negotiations? so far, our business is -- i would call it -- normal. business is usual in the u.k.

we haven't seen any dropouts yet. our major interest, knowing that 90% of our cars are exported -- i am very much interested in good trade relations between the u.k. and the rest of the world, so for that reason, that is my big wish. it's something we definitely need for being an excellent conditions regarding trade. anna: and if it's not possible to be members of the single market, what would be the second best option for you? let's wait and see what the outcome is. we are fully respecting the vote of the public in the u.k. i can't tell you to be honest what happens. the article wasn't even called, and for that reason, let's wait and see. clearly on my wish list is proper trade regulations for rolls-royce, what i would call free trade and easy trade with the whole world. ona: are you working

contingency plans if the u.k. doesn't stay in the single market? what would that look like in terms of investment? we are go with the flow. let's see what happens. we are prepared. we don't have any plan be in our drawers. we go with the flow, and i can tell you nothing has changed in the u.k. so far. it is business as normal. anna: thank you so much for your time today. have a good show in japan. up next, is disney looking to get a handle on a twitter bid? the social networking group ticked up in after-hours trade as speculation increases. that story is next. ♪

anna: welcome back to "countdown ." 7:21 here in london. there is london brightening up this morning. dollar,d against the one .2996. ecb president mario draghi spoke before the european parliament, addressing several topics, including european banks and weak profitability. he warned not to overgeneralize when it comes to the banking sector. >> there are many hundreds of that do a very good ,ob about serving their clients and we certainly don't want to bankst that, but also could be profitably consolidated. anna: that is mario draghi talking to the european parliament. we are joined by s&p chief global economist paul sh eard.

let's talk about the european economy. this shows the deutsche bank credit swap selloff. this is what we have seen over recent days, contracts reaching the highest since july. little nervousness about the health of the banking sector in europe, so many years after the financial crisis. this is not good for the european growth story. paul: certainly, europe needs a strong and healthy banking system. it doesn't have the reliance on capital markets you do in the u.s. and u.k. to a certain extent. yes, it does need a strong banking system. the ecb is in the position of implementing negative interest-rate policy, but that could be squeezing bank profitability. the supervisor of the european banking systems. have regulations in general clamped down too hard on banks post-crisis for reasons we well know and understand the echo have a clamped down so hard that it has meant that banks

have stopped lending or had an excuse not to lend? i think they're needed to be a regulatory response to the financial crisis. whether it's been an optimal response, i will leave you to judge, but clearly something had to happen. course, it has been in some sense a little inconvenient in a time in which the economy is coming out of a deep recession. havey mockers struggling few tools. anna: we have the time referendum, the referendum on constitutional changes. this is another country that struggles with weakness in the banking sector. what kind of threat does that type of political event posed to the european growth story? paul: we have seen with brexit an example, and i think we are going to see a number of political events. europe is very much a political

story. the problem in the european union, and brexit brought this focus, is it is, in political terms, a half built house. europe has to decide how to finish that house, and that is going to require the electorates of the 28 countries of the european union to weigh in. they are not going to weigh in the same way. i think there's going to be a lot of political risk, which is going to drive the economics. anna: a lot of economists tell me how much globalization has delivered to developing markets over recent decades. i was at the labor party conference, and they were talking about how the winds have changed in terms of globalization. they have moved against fewer free markets and more in favor of intervention. is there a need to re-put the clays for globalization. can anybody do that in europe?

paul: i think the lesson from what we are seeing play out around the world, the discussion with trump and the u.s., is a economists and policymakers -- policymakers reflect the economic advice they are getting -- focused too much on arguments that have good free trade laws. however, there are winners and losers from free trade, and perhaps policymakers are a little bit lacks in terms of focusing on, let's have treaty -- free trade, but let's figure out how to compensate the losers. if they are not well compensated, they will express it to you through the political system.we do you anna: for joining us, really good to hear your analysis. that will do it for "countdown." is next.ove" your pin equity markets look like they will open up in -- europeanritory

equity markets look like they will open up in positive the first oflowing three presidential debates in the united states. it looks like we will be on the front foot at the start of trade. this is bloomberg. ♪

to "on the move." berlin.london, 8:30 in caroline hyde is back in berlin, and here is what we are watching. the market moves to clinton. after the first presidential debate, the mexican currency jumps, as do u.s. futures. we are going to break down the implications. thanking blues. mario draghi says european lenders should consolidate, but will anyone go to deutsche?